is affiliate marketing really worthwhile?

Is Affiliate Marketing Really Worthwhile?

Matt BaileyHead of Affiliate

i-level

YES...if it’s managed correctly

What are we going to talk about?

• Context – Why are we asking this question?

• Looking past the last click• More than a single channel• Are all sales the same?

• Maximising your campaign effectiveness

Who Am I?

• Head of Affiliate at i-level

• Chair of IAB’s Affiliate Marketing Council

• Passionate advocate of performance marketing

Unprecedented Times

Uncertain Climate

How online is doing

• Economy shrank 2.9% in Q1 2009

• Unemployment up by 29% in the last year

• 17p in every £ spent online

• 50% spent online by 2014

Sources: ONS (April 09), National Staistics, IMRG CapGemini e-Retail Sales Index

Performance Marketing in a Recession

• Low risk marketing channel

• Paying after the money is in the till

• Scaleable

LET’S NOT WASTE A GOOD RECESSION

SCRUTINY

What clients want...

• Lower cost per sale

• More sales

• Incremental sales

• Better sales

Looking past the last click

Last Exposure

The last event

SaleSale

Event type

Display Impression

Display Click

Paid Search

Natural Search

Affiliates

Sales journeys are complex

E1 Conversion Event

E2

E3

E4

E5Event type

Display Impression

Display Click

Paid Search

Natural Search

Affiliates

Sale

Evidence for both incremental sales and interception

1. Affiliate–onlyJourneys (+)

2. Other→AffiliateJourneys (-)

3. Affiliate →OtherJourneys (+)

Sale

What you pay for

Affiliate Only

Other to affiliate

Last click sales

True Value

Affiliate Only

Other to affiliate

True value

Affiliate to other

Determining the worth

100 sales

80 sales

20

30

90 sales

Last Click Sales

Affiliate Only

Affiliate to other

Other to affiliate

True Value

More than a single channel

PPC Brand

New Technologies

High Traffic/ PortalTrue Content

Price Comparison

Voucher Code

Loyalty/ Cashback

Email

Affiliate types interact in different ways

Event type

Content

Price Comparison

Incentive

Voucher

Paid Search

Other

Transaction

Share of journey events

01 Jan 09 – 04 Mar 09

Breaking out affiliates by category

Display Click

Natural Search

Affiliate Voucher

Affiliate ContentAffiliate Cashback

Paid Search

Sale

What types of activity feeds sales, by type

Display Click

Natural Search

Affiliate Voucher

Affiliate ContentAffiliate Cashback

Paid Search

Affiliate Content1%

14%

11%

70%

1%

4%1%

13%

10%

14%61%

2%

Affiliate Cashback

0%

16%

15%

41%

3%

24%

Affiliate Voucher

Clear difference in journey lengths

% Sales

Number of exposures

0%

10%

20%

30%

40%

50%

60%

1 2 3 4 5 6 7 8 9 10

Sales %

Affiliate Cashback

Affiliate Content

Affiliate Voucher

What does this show?

• Different affiliates operate in different ways

• They require specific:

– Approaches– Marketing collateral– Remuneration models

Are all sales the same?

• Can you use affiliates to:

– Make people spend more?– Drive new customers?– Stay with you longer?– Buy sooner?

Average basket value

CompetitionContent

Incentive sites

Other Price CompVoucher Affiliate total PPC

£0

£20

£40

£60

£80

£100

£120

£140

New vs Existing Customers

• Where is the brand loyalty, with you or the affiliate?

• Would the sale have come to you anyway?

• Reward affiliates for driving new customers?

Lifetime Value• Some affiliate models

promote switching

• Do you measure the lifetime value of sales through different channels?

• Should an affiliate be rewarded for driving better customers?

Affiliates convert sales quicker

Sale event typeDisplay Click

Paid Search

Affiliates

Natural Search

Using this information to maximise your

campaign effectiveness

Looking past the last click

• Analyse what you are paying affiliates

• Remember last click isn’t everything

Determining the worth

100 sales

80 sales

20

30

90 sales

Last Click Sales

Affiliate Only

Affiliate to other

Other to affiliate

True Value

Determining the worth

100 sales

80 sales

20

50 sales

50 sales

Last Click Sales

Affiliate Only

Affiliate to other

Other to affiliate

True Value

More than a single channel

• Understand different affiliate types

• How do they interact with each other?

• Bespoke approach for each one

More than a single channel

PPC Affiliates

Cashback and

Incentive sites

Voucher Code Sites

Emerging Technologies

Email affiliates

Long Tail Content

Can they be used to complement your existing

search strategy?

Do they add incremental value or simply cannibalise other

channels?

Are you providing them with the right tools to promote you?

How do we stay ahead of the curve whilst protecting

ourselves at the same time?

What offers should we be pushing and how do we retain

control?

Incremental value or cannibalisation? How do we

harness them and achieve our aims?

How can we use affiliates?

Pull

• Capture all traffic looking for your products

– Price Comparison

– Product based content sites

– Brand/Generic PPC

• Get your brand on front of online shoppers

– Voucher sites

– Cashback

– Email

Push

EPC = CPA & CTR & OSC

Pay affiliates more

•Compelling creative

•Strong consumer offers/ voucher codes

•Securing good placements on the

affiliate site

•Deeplinking to specific products

•Reducing the customer journey

•Easy site to use

Are all sales the same?

Plan

ExecuteTest

Optimise

Making people spend more

CompetitionContent

Incentive sites

Other Price CompVoucher Affiliate total PPC

£0

£20

£40

£60

£80

£100

£120

£140

Driving new customers?

• Can affiliates be incentivised to drive new customers?– Pay a bonus for new customers

• Is it something they can influence?

• Does it vary for different affiliate types?

Driving better customers

• Do certain affiliates/ affiliate types drive better customers already?

• Do merchants measure this?

• Would certain affiliates be better incentivised working on a lifetime rev share model?

Aiding conversion

SaleSale

• Some (content) affiliates are losing sales

• Instead of paying them more, how can we help them convert?

Is Affiliate Marketing Worth It?

• All marketers are under intense scrutiny

• Incredible opportunities for us all

What you need to demonstrate

• Affiliates is a key solus channel

• You treat affiliate types differently

• You understand what different affiliates are delivering for you.

• Always be in beta

matt.bailey@i-level.com

twitter.com/mattb811